Fletcher Features

USAID’s Steve Radelet on “Astonishing” Progress in Global Development

If Steve Radelet were a newspaper editor, his above-the-fold banner headline would read: “It’s The Greatest Era of Global Development!”

He’s not, though. He’s the chief economist for the U.S. Agency for International Development (USAID), whose budget for development aid dwarfs many countries’ entire budgets. But his conviction remains the same: the developing world has made stunning advances in the past 30 years, a powerful “good news” story that most Americans do not realize.

“We live together in the greatest era of global development progress ever, from poverty reduction, income growth, improvements in health and education and democracy,” Radelet said. “This is not to say that everything is wonderful and fine, but this is to say that we’re making a huge amount of progress.”

Speaking on September 17 at the Charles Francis Adams Lecture at The Fletcher School of Law and Diplomacy, Radelet told students and faculty that critics of development policy have largely “missed the boat” on the changes that have happened since before the end of the Cold War. Multilateral institutions like The World Bank report a tripling of the average income in low-income countries since the 1960s. Further, the number of countries classified as low income by The World Bank has fallen by nearly half. And over the two decades since the Soviet collapse, the number of people living in extreme poverty has fallen by one-third.

“This is astonishing! It’s never happened before in human history. This is huge, and you know most people in the world aren’t aware of it,” said Radelet, who has also been a deputy assistant secretary of the Treasury; advisor to the governments of Liberia, Indonesia and Gambia; and author of “Emerging Africa: How 17 Countries are Leading the Way.” “It’s one of the greatest achievement in human history,” Radelet added.

This dramatic, though unequal, rising tide of economic growth is due in part to the economic policies of many countries that have liberalized trade. Such countries have also turned away from centrally-planned policies with heavy government intervention. But it’s also due, he said, to the wave of democratization that began as a trickle in the 1970s and then surged after the end of the Cold War.

In 1989, there were three countries in Sub-Saharan Africa that qualified as democracies. Now there are 20 countries that fall under this category in one form or another, and most have thriving economies.

“Twenty years ago, the argument was that successful countries weren’t democracies: Taiwan, Singapore, Hong Kong, South Korea, Indonesia, even under Suharto,” Radelet said. “Twenty years ago, most people said the relationship between development and democracy didn’t exist.”

Now, it’s a different story. It’s the first time in history that so many low-income countries have become democracies: a huge social experiment untried in the past, he said.

“It’s not easy, it’s a long struggle, but it’s a huge wonderful experiment that is going on around the world and I believe the tide is now changing,” he said. “There’s one exception—China—but outside of that, most of the countries that have been really successful in the past 20 years have been democracies.”

The big questions from development economists, aid experts and others are: what explains this progress, can it spread to other countries and sub-regions, and can it be sustained, Radelet said.

The center of weight for the developing world’s economy is shifting away from the United States and Europe and toward China, India, Turkey and Brazil. New technologies such as cell phones are leading to greater global integration. Private capital flows are accelerating to developing countries. And USAID and other development giants are being joined in the effort by massive private philanthropies like the Gates Foundation or the Nike Foundation.

“It’s a great era of development, but it’s not clear that it will continue,” Radelet said. “There is an enormous opportunity to expand that circle of development.” 

--- Mike Eckel (F13)

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